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lululemon Stock Up on Strong Holiday Sales & Raised Q4 View

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lululemon athletica inc. (LULU - Free Report) witnessed continued momentum during the holiday season in 2019, driven by favorable customer response for its innovative merchandise. Results of the holiday season were reflected in the company’s share price performance as well as its upbeat expectations for the fourth quarter of fiscal 2019. Its shares gained 4.4% to close at $245.18 yesterday and also hit the new 52-week high of $245.35.

The news arrived in time for the company’s scheduled analysts and investors’ presentation at the ICR Conference in Orlando, FL, this week.

lululemon now projects fiscal fourth-quarter revenues of $1.370-$1.380 billion compared with $1.315-$1.330 billion mentioned earlier. The latest guidance is also significantly higher than the Zacks Consensus Estimate for fiscal fourth-quarter revenues of $1.34 billion. The guidance is based on constant-dollar comparable store sales (comps) growth of mid-to-high teens compared with comps growth of low-double digits stated earlier.

Further, the company raised its earnings per share forecast by nearly 12 cents. It now projects earnings per share of $2.22-$2.25, up from $2.10-$2.13 per share mentioned earlier. The guidance is also significantly higher than the Zacks Consensus Estimate for fiscal fourth-quarter earnings per share of $2.14.

However, lululemon retained its forecast for shares outstanding at 131 million and tax rate at 28.5%.

Holiday season is that time of the year when retailers get their cash registers ringing, driven by splendid offers and discounts to woo customers. The gifting season is the key to finishing the year on a strong note for retailers as customers engage in spending huge sums to buy gifts.

Backed by the strong holiday season and robust customer demand, the company entered 2020 with a bang. Management’s relentless focus on strategic priorities and long-term goals is likely to bode well for its growth.

Notably, shares of the Zacks Rank #2 (Buy) have gained 73.7% in the past year, outperforming the industry’s growth of 20.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 


Meanwhile, U.S. retailers reported mixed holiday numbers. The holiday sales results for department store retailers like Kohl’s and Macy’s (M - Free Report) remained disappointing. However, shares of apparel retailers like Abercrombie & Fitch (ANF - Free Report) and American Eagle (AEO - Free Report) gained yesterday on strong holiday sales.

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